Prime Minister Rishi Sunak committed to granting hundreds of new licenses for oil and gas production in the North Sea, part of a push to boost Britain’s energy independence while attempting to create political dividing lines with the poll-leading opposition Labour Party.
(Bloomberg) — Prime Minister Rishi Sunak committed to granting hundreds of new licenses for oil and gas production in the North Sea, part of a push to boost Britain’s energy independence while attempting to create political dividing lines with the poll-leading opposition Labour Party.
The move is about “strengthening our energy security,” Sunak told BBC Radio Scotland on Monday. “We’re still heavily impacted by what happens when energy supplies are weaponized by dictators.”
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Energy and climate policies have risen up the political agenda following Russia’s invasion of Ukraine and a cost-of-living crisis, which has fueled concerns that green policies can hurt household finances. Critics have warned that the UK has failed to invest enough to beef up energy security as other countries, such as the US, pump money into green technology.
But Sunak’s Conservatives also see energy and climate change as areas to try to score points against Labour leader Keir Starmer. The Tories interpret their narrow victory in a special election in northwest London this month — in large part due to local opposition to new charges for vehicles falling below emissions standards — as a sign that skepticism about green policies is potentially fertile ground ahead of a general election expected next year.
At the same time, Sunak is wary of doing too much to alienate more moderate voters who prioritize efforts to protect the environment and tackle climate change. Monday’s statement tried to strike that balance — the promise of more oil and gas licenses, coupled with support for two new carbon capture projects in Scotland and northern England and a restatement of the government’s commitment to reach net zero carbon emissions by 2050.
Boosting domestic production will help the shift toward net zero, the government said, because oil and gas will still provide for about a quarter of Britain’s energy needs when that milestone is reached, Sunak said. “It makes no sense not to use the resources we have at home,” he said. “There’s no point in importing stuff from halfway around the world.”
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In a statement, the government said the first new licenses would be issued in the autumn, with over 100 expected in total in the current licensing round. It suggested a commitment to future licensing rounds — though that would likely hinge on Sunak’s Conservatives holding onto power. Labour has said it will respect licenses already granted but not give out any new ones.
Given the work involved, it’s likely that projects licensed in the current round could end up coming online just a few years before the 2050 net zero deadline. UK oil and gas production peaked about 20 years ago and has been in near-constant decline since. New fields are still being found and exploited, but the size of the discoveries has declined considerably since the North Sea’s heyday and the bulk of the resources have already been produced.
Sunak is facing pressure from the climate-skeptic, right wing of the Conservative Party to go even further in scaling back green ambitions. But that would be a huge political risk, and the prime minister has so far stopped short of their key demand to roll back the 2030 ban on the sale of fully petrol and diesel cars — while still trying to appeal to the motorist lobby.
“I just want to make sure people know that I’m on their side in supporting them to use their cars to do all the things that matter to them,” Sunak told the Sunday Telegraph newspaper. “The vast majority of people in the country use their cars to get around and are dependent on their cars.”
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Labour hit back at the government’s energy approach. Ed Miliband, the party’s climate change and net zero secretary, accused the Tories of waging a “culture war on climate” and that Labour is focused on “lower bills and good jobs.”
“Every family and business is paying the price, in higher energy bills, of 13 years of failed Tory energy policy,” Miliband said on Sunday. “It is absurd that having left this country so exposed, the Conservative Party is asking the public to believe they can fix it.”
(Updates with Sunak comment in second paragraph.)
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